Our work is based on the content of the financial demonstrations. In this scope the preparation criteria is analysed having in mind the applicable accounting principles, which include the analysis to its classification, presentation, integrity (omission), validity of all registers and periodicity of the facts.
I – Our work will take in account the most commonly used international practices, based on which the audit work will be performed in three phases:
1. Planning –understanding of the business, and survey and documentation of the system of internal control, including the documentary flow and existing authorizations;
2. Temporary – Pre analysis– closing of the activity, with resource to direct confirmation, analysis of conciliations, analysis of provisory fiscal result, among others;
3. Final – Accompaniment of the previous phases, analysis of discrepancies, emission of official reports, emission of report and recommendations of efficiency for the activity and recommendations to the management on minimizing of business risks.
II – The main substantive procedures by area are the following ones:
a) Tangible Assets
We will analyze the title, level and politics of depreciation, existence of mortgages, distrains and other pending obligations on those assets.
We will perform a counting (by sampling) – if applicable to the entity - and we will analyze its valuation, rotation and necessity of provisions for depreciation.
c) Customers and other Debtors
We will normally test by sampling the validity and collectibility of accounts receivable and will give an opinion on the necessity of provision for uncollectible values.
d) Cash and Banks
We will confirm the balances, the existence or not of loans and its plan of reimbursement, guarantees given and eventual assumed responsibilities that do not appear in the balance sheet.
We will analyze the title and register of the quotas/shares, the acts that support the movements occurred in the past two exercises and the application of legislation concerning legal reserves.
f) Current Liabilities
We will test by sampling the validity of the current liabilities and fixed assets, as well as of the accrued expenses accounts.
g) Human Resources
We will analyze the processing and its agreement with the fiscal declarations.
We will verify the eventual existence of fiscal debts and plan of regularization.
i) Profit and Losses
We will analyse the main profit and losses account ts, having in mind their validity and materiality.